AMZN Stock Hit by Soft Amazon Forecast After Strong Q1 Results
Despite posting solid earnings for the first quarter, Amazon's stock declined as the market processed a more reserved outlook for...
Quick overview
- Amazon's Q1 2025 earnings report exceeded expectations, with revenue of $155.7 billion and EPS of $1.59.
- Despite strong performance, the company's cautious Q2 guidance, citing foreign exchange headwinds, tempered investor enthusiasm.
- Amazon shares initially surged but pulled back in after-hours trading, stabilizing around the $182–$185 range.
- The stock's future momentum is uncertain as it navigates key technical levels amid external pressures.
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Despite posting solid earnings for the first quarter, Amazon’s stock declined as the market processed a more reserved outlook for the upcoming quarter.
Robust Q1 Performance Fuels Early Optimism
Ahead of its earnings release, Amazon was buoyed by strong sentiment in the tech sector. Upbeat reports from Microsoft and Meta helped lift the mood among investors, pushing Amazon’s stock higher by 3.5% in after-hours trading as hopes ran high for similarly strong results.
Those hopes were mostly fulfilled. Amazon delivered impressive first-quarter revenue numbers, easing investor concerns that had mounted earlier in the year. Still, the post-earnings rally quickly ran out of steam.
Amazon’s Volatile Price Action: From Breakdown to Recovery
Amazon shares have faced significant swings in 2025. After reaching a high near $242 in February, the stock came under consistent selling pressure. A market-wide selloff in early April—driven by fears of a looming financial crisis—sent major indices tumbling. Amazon wasn’t spared, plunging to $161, where it found support at its 100-week simple moving average.
That support zone marked the beginning of a sharp rebound. In one of the most dramatic intraday recoveries in recent memory, Amazon shares surged to $192—an almost 20% increase. However, the rally hit resistance near the 50-week SMA, with the $200 barrier remaining unbroken.
Forward Guidance Pressures Amazon Sentiment
Although Q1 results exceeded expectations, Amazon’s forward-looking statements curbed enthusiasm. Management forecasted Q2 operating income between $13 billion and $17.5 billion—below the $17.8 billion forecast by analysts. Revenue projections of $159–$164 billion also came in just under the consensus of $161.6 billion, with executives pointing to a $10 billion impact from currency-related headwinds.
This more conservative guidance reversed Amazon’s earlier momentum. After a strong regular session close, the stock dropped to $180 in after-hours trading. That said, the decline was relatively mild, and the price later steadied in the $182–$185 range as the market digested the news.
Amazon Q1 2025 Delivers, But FX and Margin Concerns Cast Shadow on Q2
Strong Q1 performance led by AWS strength, though Q2 guidance reflects FX headwinds and margin caution.
- Q1 2025 revenue came in at $155.7 billion, slightly above the $154.89 billion expected by analysts.
- Earnings per share (EPS) rose to $1.59, beating the forecast of $1.36, indicating stronger profitability.
- Amazon Web Services (AWS) posted 17% year-over-year growth, reaching $29.3 billion in revenue.
- AWS operating income jumped significantly to $11.5 billion, up from $9.4 billion a year earlier, signaling margin expansion in Amazon’s cloud segment.
Forward Guidance for Q2 2025
- Amazon guided Q2 operating income in the range of $13 billion to $17.5 billion, slightly below the $17.82 billion consensus estimate at the top end.
- Revenue guidance for Q2 is $159 billion to $164 billion, compared to market expectations of $161.62 billion.
- Management noted that foreign exchange (FX) rates are expected to negatively impact Q2 revenue by approximately $10 billion, highlighting the global exposure risk.
Amazon exceeded estimates in Q1 2025, powered by strong AWS performance and improved cloud profitability. However, the outlook for Q2 was less upbeat, with management highlighting FX pressures and tighter margin assumptions. The company’s underlying business remains sound, though near-term caution may keep investors on the sidelines.
Conclusion
While Amazon’s Q1 figures confirmed strength in its core operations, the reserved tone of its Q2 outlook muted the initial excitement. The stock remains range-bound as it tests major technical thresholds, with traders weighing immediate concerns against the company’s longer-term growth narrative.
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